For there to be a benefit in kind in respect of a loan, the loan must be ‘employment-related’ (ITEPA 2003, s. 173(1)). There are specific statutory rules to determine which loans fall into this category.

A loan is treated as being obtained by reason of the employment where the loan is made (to an employee or a relative of an employee) by any of the following (ITEPA 2003, s. 174):

the employee’s employer; or

a company or partnership over which his employer had control;

a company or partnership by which his employer was controlled (but in this case, the employee’s employer must also be a company or partnership);

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